Frasers Group (LON:FRAS), Boohoo’s largest shareholder, has publicly called for the suspension of the fashion retailer’s Founder and Executive Vice-Chair, Mahmud Kamani, following allegations of serious misconduct.
In a letter sent via legal advisers White & Case LLP to Boohoo’s chairman, Frasers cited an 8 August Telegraph report alleging Mr Kamani made loans to Boohoo suppliers through companies he co-owns, including Pinstripe Clothing (now Pinstripe Property).
The article claims the loans were repaid via a scheme in which funds from Boohoo purchases were diverted to Mr Kamani’s personal or corporate accounts.
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Frasers alleges that if proven, such actions could constitute breaches of the Companies Act 2006, Fraud Act 2006 and Theft Act 1968, including abuse of position, failure to disclose interests and theft.
The group has urged Boohoo to commission an independent forensic investigation into the matter, insisting that investigators must be entirely unconnected to the company’s current directors.
The letter also requests the preservation of all potentially relevant communications and documents, warning of possible criminal liability for destroying evidence.
Frasers argues that suspending Mr Kamani and any associates implicated in the allegations is essential to protect Boohoo, its shareholders and stakeholders.
“Given the seriousness of the matters which have now been published by the Telegraph in the Article, Frasers requests urgent reassurance from you that you will arrange for these matters to be properly and independently investigated,” the letter states.
Frasers has asked for confirmation of the company’s intended response by 15 August.
Boohoo has yet to issue a public statement regarding the allegations or Frasers’ demands.
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